NZ Dollar Rises on Expectations of Further Rate Hikes
The New Zealand dollar has strengthened to around $0.596 after Friday's trading session, backed by expectations of further monetary tightening from the Reserve Bank of New Zealand (RBNZ).
Economists widely anticipate that the RBNZ will increase its cash rate by another 25 basis points next week, with two-thirds of them predicting at least one more hike. This could potentially push the interest rate to 3% or higher by December.
The Reserve Bank's first rate increase in over three years took place in July, during which it signalled that further tightening may be needed to bring inflation back within its target range.
Meanwhile, investors are awaiting Federal Reserve Chair Kevin Warsh's speech at Jackson Hole for insights into the likelihood of a September rate move by the US central bank. Geopolitical developments continue to weigh on risk-sensitive assets, with reports suggesting that President Trump is no longer interested in reviving the June agreement with Iran.